Diazomethyl ketones are one of the most effective irreversible inhibitors of cysteine proteinases and are therefore very important in drug design. In the present study a mechanism of inactivation is proposed based on the results of model MNDO calculations of the possible pathways. It was found that the mercaptide nucleophile, on approaching the carbonyl carbon as in the catalytic reaction path, binds to the inner diazo nitrogen. The intermediate thus formed can rearrange giving a stable product, beta-thioketone, and molecular nitrogen, with a considerable energy gain. The energy barrier to this process is equal to 36.9 kcal/mol, and corresponds to a pyramidal transition state with the vertex at the methylene carbon and the base formed by the carbonyl, thiol, and diazo groups. The energy barrier can be lowered on deprotonation of the intermediate. Based on the results obtained it was concluded that good irreversible inhibitors of cysteine proteases must fulfil two structural requirements: i) the dimensions and charge distribution must be similar to those of the peptide bond and ii) a second electrophilic center must be present in the neighbourhood of the carbonyl carbon. These are requirements which are satisfied by other strong cysteine proteinase inhibitors: beta-chloroketones and beta-ketooxiranes.